How long after bankruptcy can you get a car loan?
I just got out of bankruptcy proceedings, but my used car is starting to fail. I really need a reliable car to get to work, but I don’t have enough money to buy one outright. How long after bankruptcy should I wait to get a car loan?
Glad to hear that you’re out of bankruptcy court! You should feel like a weight has been lifted off your shoulders.
If you need a car loan to get a new set of wheels, you can technically get one now. However, most personal finance experts recommend that you wait one year to rebuild some of your credit.
If you can’t wait a year, lenders may be willing to work with you, but you probably won’t like the interest rates you find. Because you’re now deemed high risk and your credit score has dropped, you’re looking at double-digit interest rates. However, shopping with lenders who specialize in bankruptcy and bad credit car loans should give you a starting point.
If you’re willing to wait a year, use the time to rebuild your credit. Some options might include:
- Getting a secured loan
- Having a friend or family member add you as an authorized user for a credit card
- Taking out a savings loan with a credit union
Alternatively, shop for a low-cost car that you can afford or save for a down payment for a car loan a year from now. Now is also a great time to find a cosigner for a future loan should you need one to get approval or a lower rate.
If you decide to purchase a used car, make sure you get the lowest rate possible on your car insurance using the Jerry app.
As a licensed broker, Jerry can help you find and compare quotes from over 50 top providers in minutes. When you find a great rate, Jerry can help you buy your new coverage! Jerry customers save an average of $879 per year!
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